ACC 557 ACC557 Final Exam PART 1 with Answers (Strayer)

ACC 557 ACC557 Final Exam PART 1 with Answers (Strayer)

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  1. Cloud Manufacturing declared a 10% stock dividend when it had 700,000 shares of $3 par value common stock outstanding. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to
  2. Township, Inc. has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2014, and December 31, 2015. The board of directors declared and paid a $50,000 dividend in 2014. In 2015, $110,000 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2015?
  3. Art, Inc., has 5,000 shares of 4%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2015. There were no dividends declared in 2013. The board of directors declares and pays a $45,000 dividend in 2014 and in 2015. What is the amount of dividends received by the common stockholders in 2015?
  4. The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is
  5. The two ways that a corporation can be classified by ownership are
  6. Brown Company has 1,000 shares of 5%, $100 par cumulative preferred stock outstanding at December 31, 2015. No dividends have been paid on this stock for 2014 or 2015. Dividends in arrears at December 31, 2015 total
  7. Which of the following statements regarding the date of a cash dividend declaration is not accurate?
  8. Xeris, Inc. has 1,000 shares of 6%, $10 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2015. What is the annual dividend on the preferred stock?
  9. Farmer Company reports the following amounts for 2015:
    Net income                                                                                $135,000
    Average stockholders’ equity                                                   500,000
    Preferred dividends                                                                       15,000
    Par value preferred stock                                                          100,000
    The 2015 rate of return on common stockholders’ equity is
  10. A coal company invests $15 million in a mine estimated to have 20 million tons of coal and no salvage value. It is expected that the mine will be in operation for 5 years. In the first year, 1,000,000 tons of coal are extracted and sold. What is the depletion expense for the first year?
  11. Grimwood Trucking purchased a tractor trailer for $171,500. Interline uses the units-of-activity method for depreciating its trucks and expects to drive the truck 1,000,000 miles over its 12-year useful life. Salvage value is estimated to be $24,500. If the truck is driven 90,000 miles in its first year, how much depreciation expense should Grimwood record?
  12. Intangible assets are the rights and privileges that result from ownership of long-lived assets that
  13.  
    Yocum Company purchased equipment on January 1 at a list price of $120,000, with credit terms 2/10, n/30. Payment was made within the discount period and Yocum was given a $2,400 cash discount. Yocum paid $6,000 sales tax on the equipment, and paid installation charges of $1,760. Prior to installation, Yocum paid $4,000 to pour a concrete slab on which to place the equipment. What is the total cost of the new equipment?
  14.  
    Mehring Company reported net sales of $540,000, net income of $72,000, beginning total assets of $240,000, and ending total assets of $360,000. What was the company's asset turnover?
  15.  
    Powell’s Courier Service recorded a loss of $9,000 when it sold a van that originally cost $84,000 for $15,000. Accumulated depreciation on the van must have been
  16.  
    The book value of a plant asset is the difference between the
  17.  
    Goodwill can be recorded
  18.  
    A mortgage note payable with a fixed interest rate requires the borrower to make installment payments over the term of the loan. Each installment payment includes interest on the unpaid balance of the loan and a payment on the principal. With each installment payment, indicate the effect on the portion allocated to interest expense and the portion allocated to principal.
  19.  
    Interest expense on an interest-bearing note is
  20.  
    On January 1, 2015, Donahue Company, a calendar-year company, issued $600,000 of notes payable, of which $150,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2015, is
  21.  
    On the date of issue, Chudzick Corporation sells $5 million of 5-year bonds at 97. The entry to record the sale will include the following debits and credits: 
  22.  
    The times interest earned is computed by dividing
  23.  
    Reliable Insurance Company collected a premium of $36,000 for a 1-year insurance policy on May 1. What amount should Reliable report as a current liability for Unearned Insurance Revene at December 31?
  24.  
    The statement that "Bond prices vary inversely with changes in the market interest rate" means that if the
  25.  
    A major disadvantage resulting from the use of bonds is that

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